2021: A Turning Point for Europe’s Railways?

Europe’s railways have not yet realized their full potential as an agent of decarbonization of transport and socially inclusive mobility because of low market share. However, recent adoption of digital and predictive technologies in areas like signaling, maintenance, and dispatch may be about to change all that. Could 2021 – the Year of European Rail – provide a vital turning point in the industry’s story?

Next year looks set to be decisive for Europe’s railways. On the one hand, it will mark the first 365 days of full implementation of the ‘4th Railway Package,’ an important stepping stone towards completion of a Single European Rail Area – or a so-called single market for rail services.

Yet on the other, it has been designated the ‘European Year of Rail,’ as the EU Commission seeks to showcase the environmental, social, and economic benefits of this mode of transport, and, in particular, its role in supporting sustainable mobility.

An Impressive Track Record

The green credentials of trains are certainly impressive. Passenger rail transport requires less than one-tenth of the energy required to move an individual by car or plane. Moreover, rail emits considerably less carbon dioxide than equivalent travel forms and is the only mode of transport that has consistently managed to reduce its greenhouse gas emissions year-on-year since the 1990s. Other forms of environmental pollution, noise, and congestion are also many times lower. On top of that, railways carry a social dividend: train travel, unlike cars, provides socially inclusive mobility, while the societal costs associated with accidents are far reduced compared to road transport.

Yet, in spite of these benefits, rail still accounts for a mere eight percent of global passenger and freight transport activity in passenger- and ton-kilometers. Even within Europe, rail’s market share of EU freight has been slipping: falling from above 18 percent to below 17 percent in recent years. Likewise, the ultimate goal of a harmonized European rail network – whereby any operator can run trains anywhere without encountering technical, legal, or operational barriers – still looks frustratingly elusive. What is holding rail transport back?

Challenges Ahead

Undeniably, the industry has found itself facing some formidable headwinds. For instance, the transformation of global supply chains and business practices within the logistics sector have undoubtedly ramped up pressure to deliver fast and flexible services at a lower cost. Meanwhile, the advent of ‘subscriber cars’ and ‘uberization’ has been steadily chipping away at rail passenger volumes as consumers switch riding habits and seize the opportunity to travel flexibly and affordably by car, without actually having to own one.

Analysis from the Boston Consulting Group (BCG), however, suggests that one of the primary reasons behind rail’s inability to deliver on its promise lies in the its sluggish approach to digitization.  A case in point has been the sector’s unwillingness to engage in the discussion of driverless trains, in direct contrast to truck manufacturers and the auto industry, both of which have, for years, been enthusiastically embracing and investing deeply in autonomous vehicles. BCG now projects that driverless vehicles will ultimately reduce the operating expenses of cargo services by as much as 50 percent, rendering rail uncompetitive if operators prove unable to rise to the challenge.

A Signal of Things to Come

Lately, however, there have been indications that the European rail industry is indeed readying itself for change and finally starting to adopt an array of digital technologies that will rationalize the business model both for freight and passenger services. Companies such as BÄR Bahnsicherung and German rail operator Deutsche Bahn AG have been pioneering the continent’s first digital interlockings, signaling apparatus that prevents conflicting movements through an arrangement of tracks such as junctions or crossings.

Under the freshly digitized signaling architecture, a dispatcher’s switching commands are transmitted to the points, signals and track contacts via network technology meaning that signals and points can now be controlled at much greater distances, enabling not only an entirely new level of flexibility in planning, but greater punctuality and resource allocation too. Indeed, some analysts are predicting that the initiative could generate capacity increases of up to 35 percent.

Companies like HIMA, meanwhile, have been harnessing the Internet of Things to offer rail companies remote monitoring, real-time diagnostics of rolling stock, and preventive maintenance. This means that sensors placed on critical train or infrastructure components can transmit data to help detect imminent defects or breakdowns. In this way, operators reduce their fleet reserves and optimize dispatching, while simultaneously increasing reliability and eliminating interruption of services.

Even on the much-neglected issue of driverless trains, tangible progress, albeit incremental, seems to be afoot. In October 2021, when Hamburg hosts the World Congress for Intelligent Transport Systems, the first ever heavy rail automated trains are due to enter regular passenger service in Germany. With automatic train operation opening the door to optimal speed profiles and substantially shorter headways (i.e. the distance or time between vehicles), such a development may well have important consequences for the future competitive edge and the modal share of rail.

All in all, as we look ahead to 2021, the ‘European Year of Rail,’ future reliability, sustainability, and safety of the continents’ railways certainly appears promising but is not yet promised. Only time will tell.